Japanese shipbuilding is hoping for a comeback to emission-free ships
TOKYO – With decarbonization a priority in the traditionally emission-intensive shipping industry, Japan’s Imabari Shipbuilding plans to bring a cargo ship to market entirely on ammonia by 2026.
Ammonia-powered ships have not yet been built, but fuel is seen as an important green energy source for the future. Imabari aims to take a leadership role in both technology and rulemaking, and potentially regain some of Japan’s shipbuilding market share that has lost to China and South Korea in the past few decades.
Imabari’s Nihon Shipyard unit will develop a bulk carrier with a capacity of over 200,000 tons, designed to carry iron ore and other cargo. It is being built at the Imabari Saijo shipyard in Ehime Prefecture.
Hydrogen-powered ships also sail without emitting carbon dioxide into the atmosphere. However, liquefying hydrogen in such a way that it can be easily transported cools it down to minus 253 degrees Celsius and poses a risk of explosion. Hydrogen also releases less energy when burned than heavy fuel oil, so ships would have to quadruple the size of their fuel tanks to cover the same distance with hydrogen, which in turn means less cargo space.
In the meantime, liquid ammonia would have to be cooled to minus 33 degrees Celsius. When burned, it releases more energy than hydrogen, so ships would only need 2.5 times as much fuel as if they were powered by heavy fuel oil.
Imabari’s new ship comes with plenty of cargo space and a newly developed storage tank that prevents ammonia from evaporating. The partner trading house Itochu will set up gas stations at various ports so that the ship can fill up a smaller tank more frequently.
Since ammonia tanks must be extremely airtight, Imabari’s ship is expected to be at least 30% more expensive to build compared to a traditional cargo ship. Still, the company expects significant demand as more and more shippers and logistics providers try to contain emissions during the shipping process.
According to IHS Markit, Japanese shipbuilders controlled 53% of the world market at their peak in 1984. But that number has since dropped to less than 10% with the rise in cheaper Chinese and South Korean competition. Mitsui E&S Holdings has decided to completely stop the construction of merchant ships. Japan Marine United will also stop building new ships.
Japanese gamers are now also feeling the heat in next-generation cargo ships, with rivals like the state-owned Dalian Shipbuilding Industry Company in China and South Korean Samsung Heavy Industries likely on the rise with ammonia. Imabari will work closely with international rulemaking organizations to gain a head start in commercializing the technology.
Ammonia is poisonous. Even small amounts of it in the air can cause suffocation, and protective measures such as preventing fuel from entering the cabins will be of crucial importance for real-world use on ships. Imabari is keen to work with groups like the American Bureau of Shipping and the Norwegian-German DNV to set technical standards for the ships ahead of its competitors in order to attract more orders.
According to the International Energy Agency, ammonia is expected to make up 46% of energy consumption in shipping in 2050, compared to the 8% forecast for 2030 and more than twice as much as hydrogen. Many shipping companies are already planning to add the fuel to their fleets.
Mitsui OSK Lines plans to acquire an ammonia-powered ship in 2028, two years earlier than originally planned. By 2035, 900 billion yen ($ 8.18 billion) will be invested to build a fleet of 110 ships powered by ammonia and other next-generation fuels.
“We anticipate that ammonia-powered engines will be developed in 2025 and ships equipped with these engines will be available by 2027 or 2028,” said Toshiaki Tanaka, Chief Environment and Sustainability Officer at Mitsui OSK.
“Ammonia-powered ships are developing faster than expected and we may be able to roll out the technology before 2034,” said Takaya Soga, senior managing executive officer at Nippon Yusen. The shipping company hopes to be able to use an ammonia-powered car transporter as early as the 2029 financial year.
This change among ship shippers takes into account new goals of the automobile manufacturers to decarbonise the entire life cycle of vehicles from production to transport to disposal. Volkswagen requires shippers to use ships that burn liquefied natural gas, which emits less carbon dioxide than heating oil.
Since shipping customers are ready to make further decarbonization demands, sea carriers and shipbuilders are taking the initiative to respond to these requirements.
The development of engines with ammonia fuel is advancing. MAN Energy Solutions, based in Germany, wants to commercialize an ammonia engine for large ships in 2024. In Japan, Mitsui E&S Holdings is developing an engine that will be supplied to Imabari.
LNG is currently the fuel of choice for the use of environmentally friendly ships. LNG emits 20 to 30% less carbon dioxide than heating oil. But as the maritime shipping market collapsed in the recent past, “Japanese shippers have stalled in using LNG ships,” said an Imabari source.
China has since expanded the introduction of LNG ships, and it appears that almost all container ships use this fuel. Since Chinese shipbuilders have developed technology to produce LNG tanks cheaply, Japanese competitors cannot easily make up ground in this area in the short term. Japan’s ability to take the lead in launching green ships for the next generation is likely to determine whether the national shipbuilding industry will sink or stay afloat.